Report: Sales of pricey California homes drop in 2009
Sales of California homes priced at $1 million or more tumbled for the fourth consecutive year in 2009, according to a report out Thursday.
The number of million-dollar-plus homes sold dropped 23.8% to 18,621 in 2009 from 24,436 in 2008, according to San Diego real estate research firm MDA DataQuick.
The decline was the result of buyers holding back, a weak mortgage market for big loans and the drop in home prices over the last several years dragging the value of several houses below the $1-million-dollar threshold, DataQuick said.
"Prestige home sales are a unique subcategory of the real estate market. The buyers and sellers respond to a different set of motivations,” DataQuick president John Walsh, said. “In the multimillion-dollar price ranges, decisions are largely discretionary and aren't as dependent upon jobs, prices and interest rates the way they are for most buyers and sellers."
The trend underscores the nature of the state’s housing recovery. Sales of California home sales at all price levels increased 16.9% percent last year, to 460,166 from 393,703 in 2008. One in 25 homes sold for a million dollars or more last year, while the year before it was one in 16 and was one in nine in 2006.
Lower-end homes largely fueled last year’s buying spree as both investors and first-time purchasers sensed opportunity in steeply discounted foreclosure properties across the state.
The Federal Housing Administration, a federal agency that insures mortgages often used by first-time buyers with little cash for a down payment, has played a big role in supporting the market for lower-end properties in California and some move-up markets. In pricier California communities, such as Los Angeles County, the limit for FHA loans was increased to $729,750 from $362,790 less than two years ago.
But more expensive homes haven't enjoyed that same level of government support nor were they hit as hard by the subprime mortgage meltdown.
Traditional luxury markets are faring better than those that experienced large price increases during the bubble years. For instance, million-dollar-plus home sales in Riverside County dropped 48.6% last year while Los Angeles County saw a 13.3% decline.
The most expensive purchase confirmed by DataQuick last year was a nine-bedroom 10-bathroom home in Bel-Air that was built in 2008, spans 22,721 square feet and sold for $26.5 million last July. It was also the largest of the million-dollar-plus homes sold last year.
The communities where virtually all home sales were in the million-dollar category were Portola Valley and Atherton in San Mateo County, Newport Beach in Orange County, Ross in Marin County and Rancho Santa Fe in San Diego County.
The sales of million-dollar homes peaked at 54,773 in 2005.
-- Alejandro Lazo
Photo: This Hollywood Hills property sold last year for $3.1 million. Credit: Val Riolo